San Francisco Gasoline Strengthens on Los Angeles Refiner Buying
The discount for Carbob in San Francisco narrowed 4.25 cents to 4.25 cents below gasoline futures traded on the New York Mercantile Exchange at 4:18 p.m. East Coast time, according to data compiled by Bloomberg. In Los Angeles, the same fuel strengthened 3.5 cents to a discount of 8.25 cents below futures.
Prompt delivery in San Francisco gained 2.18 cents to $2.8113 a gallon, while the fuel sold for $2.7713 a gallon in Los Angeles. San Francisco Carbob hasn’t traded more than 4 cents above Los Angeles Carbob since May, when three California refineries reported maintenance within nine days of each other.
“This means some refinery has a problem and is buying to cover,” said David Hackett, president of energy consultant Stillwater Associates in Irvine, California. “That refinery may have a big enough problem that he is lifting the entire market, not just the Bay.”
Carbob in San Francisco is generally cheaper than in Los Angeles because demand is lower in the Bay area, Hackett said.
“An L.A. buyer is in the market,” said Bob van der Valk, an independent fuel pricing analyst in Terry, Montana. “Exxon Mobil is buying gas as well but not enough to justify the number being done.”
Randy Simpson, vice president of supply and trading at Idemitsu Apollo Corp. in Sacramento, California, said refiners have been “buying a lot of barrels in the Bay. There’s some refinery issues going on.”
Exxon Mobil Corp. (XOM)’s Torrance refinery in California reported an equipment breakdown last week. The 150,000-barrel-a- day plant shut two compressors associated with a hydrocracker, according to two people familiar with the refinery’s operations.
Chevron Corp. (CVX) is running the 297,000-barrel-a-day El Segundo refinery in California at reduced rates while working on a naphtha hydrotreater, a person with direct knowledge of the matter said Aug. 9.
Conventional, 87-octane gasoline in Portland, Oregon, strengthened the most since March to a premium of 13 cents versus gasoline futures. That’s the largest premium for the fuel in almost 10 months.
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